Income Tax

Income Tax Return Filing Due Date Extended for Businesses by CBDT

CBDT is an acronym for Central Board of Direct Taxes, a statutory authority responsible for the administration of direct taxes through the income tax department. The board provides updates regarding income tax through various notifications. One such notification was released by the board on 26^th October 2022 about extending the due date in respect of filing an Income Tax Return for Businesses.

The article discusses the aspects covered in the notification to provide clarity in respect of the same.

CBDT Extended the Due Date for Filing Income Tax Return

CBDT extended the due date for filing the Income Tax Return for businesses from 31st October 2022 to 7th November 2022 for AY 2022-23 vide Circular No. 20/2022 in the exercise of its power conferred under Section 119 of the Income Tax Act 1961.

CBDT is empowered to direct the authorities of income tax to allow a refund, claim for exemption or deduction, as well as any other relief prescribed under the income tax act, even beyond the expiry date.

Reason for Extension of Due Date

The reason for such an extension by the CBDT is due to the fact that the Board had already extended the date for filing the tax audit reports from 30^th September to 7^th October 2022 for the assesses referred to in clause (a) of Explanation 2 to sub-section (I) of section 139 vide Circular No. 29/2022 and the extension of the due date for the filing of ITR is in consequence to the same.

Section 119 of the Income Tax Act clearly mentions that CBDT has the power to direct tax authorities to allow the aforementioned reliefs only if it is genuinely out of the control of the taxpayer to make the required claim in the prescribed time limit.

What is an audit report under the IT Act?

There are certain audit reports which must be furnished by the taxpayer in order to prove the taxpayer’s adherence to compliance with the various provisions of the Income Tax Act. The provisions regarding the tax audit are provided in Section 44AB of the I.T Act.

What is Section 139 of the IT Act?  

Section 139 of ITA 1961 deals with the filing of an Income Tax Return by the assesse. The relevant provisions of this section are discussed below –

Cases where ITR Filing is Mandatory

It is mandatory for every person, except for a company or firm that isn’t required to file an ITR under any other provision of sec – 139(1), to file the ITR if in the previous year if

• There has been a deposit of an amount which exceeds Rs. 1 Cr. in one or more current accounts maintained by the person with a bank or a cooperative bank.
• The person has incurred aggregate expenditure in excess of Rs. 2 lakh either for himself or any other person for travelling to a foreign country.
• The payment of the electricity bill has resulted in the expenditure exceeding Rs. 1 lakh as incurred by the person
• The person fulfils any other prescribed condition.

It must be noted that the CBDT has released a notification vide no. 37/2022 on 21-04-2022, prescribing additional conditions under the 7th proviso of Sec-139(1) of the Act, which is discussed herein under –

• If total sales, gross receipt, or turnover of the business exceeds Rs. 60 lakh during the last year
• in case the total gross receipt of the profession exceeds Rs. 10 lakh during the last year; or
• The total tax deducted and collected by a person during the previous yr. is Rs. 25,000 or more. The threshold limit for resident individuals of the age of 60 years or more shall be Rs. 50,000
• If the aggregate deposit in either one or more than one savings bank account of the person is at least Rs. 50 lakhs or more during the last year.

Filing ITR in Case of Loss

It is not mandatory for the person to file the income tax return in case of incurring a loss in the previous year. However, such filing becomes mandatory in the following cases.

• The incurred loss in under the head of Capital Gains or Profit and Gains of Business and Profession’, and the taxpayer wishes to carry forward such loss, which is possible only if the return is filed within the prescribed due date.
• If the loss is under the head of House or Residential Property’ it can still be taken forward even after the filing of ITR post  the due date.
• In the event of filing the loss for return under section 142(1), apart from the loss under the head ‘House Property’, it can’t be carried forward.
• If the loss is required to be offset against other income in some category for the same year, it can be offset even if the ITR is filed after the due date.

Belated Income Tax Return

A belated return can be filed by the taxpayer as per 139(4)  in case of failure to file such a return by the prescribed due date, the belated return can be filed at any time 3 months prior to the end of the relevant AY or prior to the finishing of the assessment, whichever is earlier.

Revised Returns

A revised return is usually filed in cases of omission of the required information while filing the income tax return or commission of any mistake during the same. In such cases, the taxpayer can file the revised return after making the required corrections.

It must be noted that such revision can only be made where the ITR is filed under sec 139 (1) or 139 (4) of the Act, and the revision won’t be valid in case the ITR is filed pursuant to a notice u/s 142(1) of Act.

Defective Return

The Act provides a list of circumstances wherein the return filed by the taxpayer would be considered a defective return. Therefore it is the responsibility of the taxpayer to rectify the defects within 15 days, not before obtaining intimation about the defects from the assessing officer and being provided with an opportunity of being heard in this regard.

Consequences of Delay in Filing ITR

Delay in filing the income tax return may attract certain adverse consequences, which are enlisted below:

• Loss (except loss under the head “Income from house property”) shall not be carried forward.  
• Interest u/s 234A and fee u/s 234F shall be levied on the taxpayer
• Non Availability of Exemptions u/s 10A, 10B and Deduction under Part-C of Chapter VI-A
•  Default in furnishing return of income shall attract a fee of Rs. 5,000. However, where the taxpayer’s total income doesn’t exceed Rs. 5, 00,000, the fee payable would not exceed Rs. 1,000.

Conclusion

The extension of the due date in respect of filing the income tax return for businesses by CBDT can provide relief for taxpayers, especially after the extension provided in the case of tax audit reports. Such an extension can encourage the taxpayer in the timely filing of tax audit reports as well as the income tax return for the AY 2022-23.

Read Our Article: All Types of Income Tax Return Filing In India

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